June 4, 2018 | Why a Strong Dollar Won’t Hurt the U.S. Economy

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

How will the U.S. economy, particularly exports, cope with a rising dollar? Pretty well, we should expect. Even though a strong dollar will create drag for U.S. companies geared to selling abroad, there are reasons to doubt that it will slow the steady trek higher this summer that I’ve projected for U.S. stocks. For one, investors have been discounting a strengthening dollar all along, and it is already baked in the cake. And for two, it will rev up domestic consumption of imports. Granted, the lion’s share of the proceeds will go back to Canada, Europe and Asia. But U.S. vendors — of everything from cars to anchovies — will take their cut, and that should be sufficient to provide a net boost to an economy that has continued to chug along. Incidentally, my target projection for the Dollar Index, currently trading for around 94.04, is 96.43 — a pretty big move percentage-wise. This is corroborated by a technical pattern I’ve flagged to subscribers on the Rick’s Picks home page tonight. There is an unusually good trading opportunity in the offing, but without going into the details, it makes me even more confident about the dollar’s continued rise.